CORPORATE TAX STRUCTURE: A COMPARISON AMONG BANGLADESH, INDIA, AND PAKISTAN

Abstract

Corporate tax rates have a significant influence on investment decisions, with lower rates generally encouraging both foreign and domestic investment. This study examines and compares the corporate tax structures of Bangladesh, India, and Pakistan to evaluate their relative competitiveness and effectiveness. The study utilizes secondary data covering corporate tax rates and structures for the year 2022, as well as statutory corporate tax rate data from 2017 to 2021. Data sources include PwC, Trading Economics, and national revenue authorities. The analysis was conducted using Microsoft Excel. The results show that in 2022, the corporate tax rate for publicly traded companies was 22.5% in Bangladesh, 30% in India, and 29% in Pakistan. For private limited companies, the rates were 27.5% in Bangladesh, 25–30% in India (depending on turnover), and 29% in Pakistan. The banking sector tax rate in Bangladesh reached 40%, compared to 35% in Pakistan and 22–40% in India, depending on whether the classification is domestic or foreign. From 2017 to 2021, Bangladesh's tax rate increased from 25% to 32.5%, while India's declined from 34.61% to 30%, and Pakistan's dropped from 31% to 29%. The significant findings suggest that Bangladesh has the highest corporate tax rate among the three countries, with a 7.5 percentage point increase in 2021. In contrast, India and Pakistan reduced their rates by 4.61 and 2 percentage points, respectively. These quantitative differences indicate that Bangladesh's corporate tax structure may hinder investment attractiveness and economic efficiency. At the same time, India and Pakistan offer comparatively favorable environments through more flexible and diversified tax regimes.

JEL Classification Code: H25, H26, H32, O23.